The Manchester Ship Canal Company Ltd v Vauxhall Motors Ltd (2019) UKSC 46

Just a quick note to record that the Supreme Court has held that the equitable remedy of relief from forfeiture is not restricted to those with a proprietary interest (lease/tenancy, mortgage etc) but can also extend to licensees with possessory rights (ie a right to occupy or use the land). The whole thing is fascinating, but this is not the place to get into the details of the history of equitable relief.

However, the Supreme Court was careful not to give this as a general equitable right to all licensees. The licence in this case was perpetual – so long as the annual fee was paid – and granted near exclusive occupation. Further it involved infrastructure built, installed and maintained by the licensee.

This case does not alter the underlying approach of equity to claims for relief from forfeiture. Even where the preconditions for forfeiture have been met, relief will not be given if the case falls within one of the categories of case in which equity does not intervene. The inappropriateness of relief from forfeiture is most likely in “inconsistent with ordinary and lawful commercial bargain” cases, in which the approach of the courts is clear. It is, furthermore, not every type of licence which will be productive of rights in respect of property, as in this case. Further, in this case, the licence was prevented from being a lease only because it was perpetual and if it had been a lease there is no doubt that there would have been jurisdiction to grant relief from forfeiture. Moreover, the extension of the law in this case is a logical development conducive of a coherent legal principle on the basis that the gap between relief in relation to realty and relief in relation to personalty should, as Lord Briggs has explained, be closed so far as possible. In summary, the application of the doctrine to a right arising under a licence is a small step, and it is, as I see it, unlikely to be the case that this development of the law will turn out to involve any significant loss of certainty in what the principle of relief from forfeiture stands for.

Comment

While most leases (commercial or residential) and tenancies now either fall under statutory provisions for relief from forfeiture, or have a separate statutory scheme excluding forfeiture (eg all assured/assured shorthold tenancies), there are some areas such as licences to occupy that remain largely outside statutory schemes. Two that come to mind are property guardians, and s.193 Housing Act 1996 temporary accommodation licences. While neither can be described as ‘in perpetuity’, being instead of uncertain duration, I do wonder if this approach to equitable relief from forfeiture could be deployed in – for example – termination of licence due to arrears cases.